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The fine line between advising clients in bankruptcy cases and abusing bankruptcy law has been disputed between judges and lawyers alike for the past couple of years.

Many attorneys feel they have the right to advise their clients how they see fit. They believe they are guaranteed this right – this freedom of speech – under the first amendment.

But at what point does this advice cross the line? And does it abuse the bankruptcy system that was set in place to protect all those involved?

In 2005 the Bankruptcy Abuse Prevention and Consumer Protection Act was developed to prevent abuse of the bankruptcy system. This is the same law that created the Chapter 7 means test. A provision of the act prohibited attorneys from advising their clients to accrue more debt before they filed for bankruptcy.

In 2007, two bankruptcy attorneys in Minnesota, along with two of their potential clients, sued the courts, claiming the provision violated their constitutional rights to free speech, reports Reuters.

A U.S. appeals court in Missouri agreed. They ruled that the law prevented attorneys from fulfilling their duties to their clients. The appeals court also said that it stopped them from giving their clients the financial advice they needed.

But recently the Supreme Court overruled the lower court’s decision. They said that the provision is set up to stop lawyers from abusing the system – not to take away their rights.

Justice Sonia Sotomayer reversed the ruling by the U.S. appeals court. She said that the provision of the Act does not violate free speech rights.

She said that the law was made to prohibit misleading commercial speech. She also upheld the law’s requirement to have attorney’s make certain disclosures in their advertisements.

Sotomayer said that it would make no “sense to prevent attorneys and other debt relief agencies from advising individuals thinking of filing for bankruptcy about options that would be beneficial to both those individuals and their creditors.”

Sotomayer continued to say that in some cases it might be appropriate for attorneys to advise their clients to pick up more debt. For example, in some cases accruing more debt may reduce a Chapter 7 bankruptcy filer’s interest rates or give them a chance to repay creditors during the case.

At this point, bankruptcy attorneys at this point will have to follow current laws when advising their clients.